Want To Build A Six-Figure Freelance Business? Now Is Your Moment

The number of six-figure freelancers is rising dramatically, according to a new report by MBO Partners, a provider of back-office support to independent workers in Herndon, Va.

Three million full-time independent workers—or 17.9% of full-time free agents— earned more than $100,000 in 2016, compared to 2 million in 2011—a 50% increase, the report found.

Even among the general pool of freelancers, 47% reported making more money on their own than in a traditional job. The average gross income of full-time independent workers jumped to $64,450 per year, up 30% since 2011, despite general wage stagnation for workers in traditional jobs, according to the study.

These findings about rising incomes are good news if you agree with the study’s projection that by 2021, between 46% and 48% of working adults will be doing independent work or will have done it in the past.

Gene Zaino, president and CEO of MBO Partners, believes Brexit may result in more work for consultants.

As one might expect in a job market with very low unemployment, the total number of full-time freelancers dipped since last year. It fell by 5%, or 800,000, to 16.9 million as some freelancers returned to full time employment. “We think the people that didn’t want to do independent contracting went back to full time work,” says Gene Zaino, president and CEO of MBO Partners. Many people were thrust into freelancing in the recession and its aftermath, when their full-time jobs dried up, and not all embraced it.

But people who went willingly into independent work have become more bullish on it, he says. In the survey, 78% of free agents said they plan to stay self-employed or build an even larger business. Many reported liking the flexibility and control they have over their own schedules, factors that often show up in surveys of the self-employed.

Among independent workers, 65% said their satisfaction is very high, and 22% gave independent work a top score of 10, the survey found.

In perhaps the most interesting finding, the study suggested that freelance businesses may be more secure than traditional jobs. The average tenure for full-time independent workers is 10.5 years, versus 4.6 years for traditional employees, the survey found.

But the research points out sharp differences in how independent and traditional workers view self-employment—viewpoints that may be playing a role in the ongoing, post-Industrial-Era debate about companies like Uber and their relationships with their workers.

Most people in traditional jobs (55%) surveyed saw independent work as very risky—an 8 to 10 on a scale of one to 10, with 10 being the riskiest. And among traditional workers, 61% see the lack of predictable income as the biggest risk; 46% reported that having to invest their own money in an independent business was a negative factor.

Given the lack of savings among many Americans, these views are not surprising. Recent research from the Federal Reserve Board found that 46% of Americans would have trouble coming up with $400 for an emergency. The possibility of missing a steady paycheck for even one week or using household funds to start a business under those circumstances would truly be risky.

But what I found interesting was how differently the folks without steady incomes viewed independent work. Among independent workers, 43% find freelance work more secure than traditional employment, and 33% see it as equally secure.

“It’s very bifurcated,” says Zaino.

Among Americans who do want to do independent work, there are varying draws, the research found. Millennials are using freelancing to get work experience and build a resume, the study found. They represent 40% of full-time independent workers—the largest group. Baby Boomers seeking flexible work in retirement are also driving the trend, the study found. They make up 31% of full-time independent workers.

Many people of all ages are also turning to independent work as a part-time or occasional source of cash, MBO Partners found. Although the total independent workforce is down 5.4% from 2011 to 39.8 million--the same level as 2014—there are still 12.4 million part-time freelancers, who work from one to 15 hours a week, and 10.5 million occasional freelancers.

Zaino believes Brexit may provide a boost to independent workers in certain fields. “There is going to be a need for consulting to figure out how to disconnect the U.K. from Europe,” says Zaino. “There is going to be a lot of strategy consulting and technology consulting.”

And if the economy slows, as expected, that will bring uncertainty and a tendency for employers to rely more on flexible work arrangements, he notes. “Companies tend to defer hiring and instead use contract labor,” he says.

That’s bad news for the fans of traditional jobs who see contract work as shaky but could be a boon for well-qualified free agents trying to break the six-figure revenue mark.